Citizen Tech

November 6, 2000

The News & Observer
By Carlene Hempel; Staff Writer

It's early evening on the first Thursday of the month and some 30 members of InterNetWorkers are gathered at Raleigh's E-Cafe to chatter about what interests them - IMAP addresses, Palm Pilot syncing, the elegance of Unix.

As they sit at tables crowded with cell phones and personal digital assistants, and dig into plates of risotto and portabello mushrooms, these technology workers in their 20s and 30s might look like they're here just to socialize. Not so.

This, as a matter of fact, is their version of a business meeting. Consider it another snapshot of the growing gap between old and new economy.

The culture shift among new technology companies has been well documented - T-shirts over ties, bikes instead of BMWs, long hours rather than long lunches. But there's another difference surfacing about them that has implications beyond their wired world.

Turns out that the new tech citizens tend to shy away from traditional business and civic organizations in favor of sticking to their own kind, groups focused on technology. That means that Rotary and Lions clubs are off their list. And, they tend to ignore traditional corporate philanthropy habits. That means no high-profile fund drives or companywide charity campaigns.

"We're not into any groups or chambers or anything. We didn't even think about it," says Troy Walker, president of Zeris Interactive, a Raleigh-based tech company that builds e-commerce sites for the Web. Walker, like many of his peers, cares more about keeping it global than local, and so doesn't see the relevancy of chit-chatting with florists or dry cleaners or convenience store owners - the folks who he figures make up the rank and file of traditional business groups.

And he wouldn't even consider collecting cash for nonprofit agencies and then blindly handing over a fat check. Neither would most of his peers.

They want to know exactly where the money is going, how it will be used and most importantly, that it will actually make a difference. That's why many resist giving money, choosing instead to donate computer equipment, a Web page, or software training.

"No way am I just going to just write a check," says Brian Gullette, vice president of sales and co-founder of Foveon, a Durham-based e-marketing firm. "Maybe it's a post-Watergate thing, but you want to make sure your money is not going to be poorly managed. You don't want it going out the door to some faceless bureaucracy."

In the past, corporate citizenship was defined by these basic tenets - memberships and giving patterns. The tech citizens confess: They have poor records in both.

Have they failed the good neighbor test? No, they'd say. They're just changing the answers.

How to remain relevant:

The weekly afternoon meeting of Raleigh's largest Lions Club chapter - held at Highland United Methodist Church on Ridge Road - opens with the singing of "America." The 100 members, mostly men and almost all gray-haired, remain standing for the Pledge of Allegiance. Then, a prayer and a moment of silence for Bob Moore, a member since 1956 who died two weeks ago.

The rest of the program is taken up by a speech from Bill McNeal, superintendent of Wake County Schools, stumping for a bond issue.

This is precisely the kind of meeting tech citizens avoid.

"The only thing I knew about the Lions Club growing up was they wear funny hats and had boxes in the mall where they would [collect] eyeglasses for poor people," says Greg Cox, local techie and a regular at InterNetWorkers, a 2-year-old networking group that, unlike many traditional clubs, doesn't require official membership or collect dues. "I don't think anyone in our generation knows what they stand for."

This worries Arthur White, an associate vice chancellor at N.C. State University and president of this Lions Club chapter. He wonders how he can make his group seem relevant to young entrepreneurs. When he joined the Lions in 1978, there were more than 300 members. Today, the chapter is down to 166. He thinks about 20 years down the road.

"There's going to be 10 of us," White says. Then, he fears there will be no one.

As district governor for the Rotary, Carol Allen oversees 42 clubs throughout central North Carolina. She remembers a day when new business owners automatically joined.

"It used to be that if you had a Rotary Club, the president of a company belonged," says Allen, publisher of the Cary News. "Anyone who opened a small business 10 years ago, the first thing they did was go to the Chamber of Commerce and pay their dues." Today, she says, the difference is striking.

"I've gone to some Rotary Club meetings, I'm 48, and I was the youngest person in the room. We're aging out," she says. "We've got to bring in some younger people and we've got to make them understand that this is relevant" to business owners of any age.

Even the chambers get that feeling, as if they've thrown a block party and half the neighborhood decided to stay home. They hear about Red Hat. They know the high-tech scene is booming. But where are the geeks?

"I don't see them anywhere," says Joel Harper, president of the Chapel Hill-Carrboro Chamber of Commerce. "How do I know they exist? I know they exist because people keep talking about them. If they fit that stereotype, they show up for work at 2 p.m. and leave at 3 a.m. and you don't see them. They just hang around with each other. They're based here, but their clients are all over the world. They don't sell a product to people who live here, so they don't need a chamber, or a rotary."

He's almost right, say local leaders of the New Economy. As they tell it, the local scene is not just less appealing; it's not what they're about.

"We're more concerned about spending our time going to Seattle or Boston to build the alliances we need," says Jeff Williams, president of NextAudio, a Durham-based Internet music company. On top of that, Williams doesn't believe the old guard understands his kind of business enough to help.

When he thinks of traditional business and civic clubs, he pictures a social organization more interested in Saturday afternoon softball games and bake sales than big business. It's romantically nostalgic. It's also somebody else's life - his father's, maybe.

Of course that isn't what the chamber, or the Lions Club, is really like, says Harvey Schmitt, president of Raleigh's chamber chapter. But Williams' perception is important, he admits.

Schmitt knows that to appeal to New Economy entrepreneurs, organizations like his would have to re-engineer themselves to be more like, say, the Durham-based Council for Entrepreneurial Development, a group focused just on start-ups and their needs, or some of the new clubs, such as FirstRound.org and Critical Mass, which focus on networking, socializing and comparing e-business strategies. And that's just not going to happen.

"Our interest is in building an economy and making certain that the quality of life in the marketplace remains viable and appropriate for companies to thrive," he says. "In many instances, the New Economy companies are very much focused simply on survival."

He hopes than once these companies mature, their members will as well, "and organizations like ours will come into favor."

But what if it goes the other way? What if organizations like these do become irrelevant to this new generation of business owners and employees?

"You have to, in some ways, indict the associations," says Dick Blackburn, an associate professor of management at Kenan-Flagler School of Business, who recently took note of this issue when he was asked to speak to a group of Kiwanis members, and, like Allen at the Rotary, saw that he was the youngest person in the room.

"What would these organizations have to offer that would be of value to the dot-coms?" he asks.

L. Merritt Jones, a member of the Lions Club in Raleigh since 1965, when he was 35, knows what his group has to offer. It's friendship. A chance to do good for people, to make friends that will last 30 and 40 years.

"People today, maybe they are not interested in the fellowship that we have, and the camaraderie," he says. "I hate to use the word self-centered, but I think they are more interested in themselves than in others."

A matter of style:

Naturally, the tech citizens disagree. They say their regular meetings might have different menus - no fried chicken and hush puppies for them - but the idea is the same. Bond. Tell jokes. Trade business ideas.

And self-centered? Again, that's simply a difference of style. Traditional corporations make generous donations to local groups and causes. The tech citizens also give. But they do it their own way. They rarely break out the checkbook.

"They think, 'How can we make an impact directly rather than give money to an institution? Who knows if my money is ever going to have an impact,' " says Arvind Malhotra, assistant professor of information technology and e-commerce at Kenan-Flagler School of Business.

In a way, this merely reflects the climate these companies operate in, where everything is driven by a rate of return and value. Also, a start-up doesn't have as much money as an established corporation, meaning it has to be savvy about what it gives. That often translates to offering goods and services instead of a check.

Hesketh.com, for example, a Raleigh-based Web development company, has chosen just one project to throw its resources toward. But seven of the company's nine employees are working on it: building a Web site for a nonprofit Wake County Schools group called Building Character that focuses on teaching students about honesty, respect and responsibility.

"Our company is based on those value traits, of having character and of doing things with character, of being completely honest," says Michael Tucker, vice president for business development at Hesketh. "It was something that we felt had the potential to have a tremendous impact, and who wouldn't be behind building character in little people?"

Early in the process, the Hesketh folks learned that the company wouldn't be able to claim the $15,000 worth of work it would take to build the site on its tax returns. If Hesketh simply wrote a check for that amount and handed it over to the school, it could claim that as tax deductible. Still, the employees went ahead.

Cisco Systems, though a giant compared to Hesketh, has adopted the same kind of attitude. "You won't see us giving large checks to build a building somewhere," says Joe Freddoso, local spokesman for the company. "We want to make sure what we give is delivered directly to those in need."

Part of that mission is fulfilled through the company's networking academy program, which teaches children how to use computers. Cisco's community development staff also awards grants to specific organizations. This year, for example, Cisco has given about $20,000 to the Triangle Regional Options for Substance Abusers (TROSA) in Durham, with the money going to train instructors to teach computer skills to its clients.

Bill Shelp Peck, senior vice president for resource development for the Triangle United Way, says those are the rules he's learning to play by. He has no choice if he wants to include New Economy companies as part of the United Way's giving campaigns.

"We haven't given up on these companies, we're just trying to figure out a way to have a different conversation with them. Philanthropy for the new companies means a little bit more than automatically accepting United Way as the only choice. They want to learn more about the organization," he says. "They don't want to just do what they've been told to do. They want ownership of the decisions."

As a comparison, Peck says traditional companies that support the United Way tend to have 50 percent to 60 percent participation among employees. Peck asks for only 20 percent from the tech companies he approaches. "With the high-tech start-ups, we really do shoot low. We have to introduce the United Way into their culture."

Gullette, from Foveon, laughs at how he used to give blindly to the causes he believed in.

When he was a kid, he rode his 15-speed Bridgestone bike across the country to raise money for the Hunger Project.

"They had this wonderful mission statement, to end hunger by 2000," he says. "And instead of laying out an effective plan to get it done, they tug on your heart strings. I won't respond to that anymore."

Today, he views giving as he does his bottom line. He has to see results. "I think it's a great thing that's happening," he says, "a great and wonderful revolution. It could be that the greatest days of philanthropy are ahead of us."

Maybe so. But days of great change are ahead, too.

The United Way might be changing its ways to accommodate the New Economy, but will the business groups? Could they even change enough?

Jim Roberts, president of the month-old FirstRound.org techie networking group, has attended a Rotary and a chamber meeting, in Charlotte, where he is from. He does not believe that the old school and the new school can be reconciled.

"Please don't make me come off as the spoiled New Economy jerk," he says, "but there's a level of energy that technology entrepreneurs understand, and when they go to another type of meeting, people just want to know what we do. We're always explaining what we do, as opposed to us getting anything out of it. There's very little give-and-take."

And besides, he says, "Why would I go to a room of people that I don't have anything in common with? I have to get something out of it."

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